The head of a Chicago preservation group alleged Wednesday that a project manager for a city developer offered the group $2 million to stop the push to declare the McGraw-Hill Building on Michigan Avenue a landmark.
A spokesman for developer John Buck denied the charge, even as the city’s legal department began looking into the allegations and Mayor Richard M. Daley said there could be a criminal investigation.
The allegations were disclosed after city officials abruptly canceled a public hearing about placing the McGraw-Hill Building on the city’s list of structures protected from demolition. Buck wants to tear down the 16-story, Art Deco office building at 520 N. Michigan Ave. for a $211 million mall anchored by Seattle-based Nordstrom Inc.
It was unclear how the allegations would affect the high-stakes political and financial battle over the proposed mall. But they seemed sure to delay a project that proponents say will bring jobs, tax dollars and a sought-after retailer to Chicago, and which opponents characterize as another blow to the historic character of the city’s Magnificent Mile.
“We’re sitting on the sidelines waiting for this project to go forward or die,” said David Mackie, Nordstrom’s real estate vice president. “If the city doesn’t want it, the city doesn’t want it.”
The uproar occurred after city officials produced a letter from Brad White, president of the Landmarks Preservation Council of Illinois, describing a “senseless offer and disturbing threat” to the organization from a Buck representative.
According to the letter, the representative offered the organization “some or all” of $2 million at a meeting last Thursday after asking: “What does LPCI want out of this?”
White was told that the offer would be “off the table” if it were not accepted before Wednesday’s hearing, according to the letter. It also said the Buck representative had issued a veiled threat, telling White not to testify at the hearing.
The letter, which was sent to city planning commissioner Valerie Jarrett, did not name the Buck representative. A Buck spokesman said the person White is accusing of making the offer is Greg Merdinger, the project manager for the proposed development.
“I stand by the letter,” White said Wednesday after the hearing was put off by at least one month. He declined to elaborate on the allegations.
The preservation group seems an unlikely candidate for a payoff. It is a small, non-profit lobbying group tucked away in a suite of offices in the historic Monadnock Buiding. Though the group possesses a degree of influence, it controls no votes and has regularly lost landmark battles, like last fall’s fight in which Buck won the right to tear down the 600 block of North Michigan for a $100 million mall.
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The Commission on Chicago Landmarks recommends whether buildings should be protected from demolition; the City Council has the final say.
The allegations evoked an era of blatant corruption when an envelope stuffed with cash reputedly bought zoning changes from corrupt aldermen.
“This shocks me,” said developer Miles Berger, author of “They Built Chicago,” a history of Chicago developers. “John Buck is a very bright, very capable guy. I just can’t imagine that.”
White, 34, is a vice president at Clarion Associates, a Chicago real estate consulting firm that frequently works for developers. City officials said they took his allegations seriously. “Brad White has a very good reputation in this town,” said Jarrett.
In an interview, David Smith, Buck vice president who acted as a spokesman for Merdinger, acknowledged that money for the landmark preservation society might have been discussed at the meeting between White and Merdinger. But he said the money would have helped fund a two-year study of growth on North Michigan Avenue that the preservation society has sought. City officials were aware of discussions between Buck and LPCI about the study, Smith said.
In a letter to Peter Bynoe, chairman of the landmarks commission, Smith denied that Merdinger had threatened White. Instead, he said, Merdinger suggested that White “recuse himself from testifying,” and that another LPCI representative replace him because of White’s alleged conflict of interest.
White has been retained as a historic preservation consultant by another Chicago developer, Stein and Co., which is competing with the Buck firm for the commission to redevelop Ft. Sheridan, according to Smith. In addition, Smith said, White earlier worked in a similar position for the Buck firm, but his contract was not renewed.
Buck, Merdinger and Smith all were present as the hearing was about to convene Wednesday in a second-floor room in the Chicago Cultural Center, 78 E. Washington St. But after consulting with city officials, they quickly left.
“I’m going to have to cancel the hearing,” Bynoe told a surprised crowd of more than 50 people. “The proceedings have a potential cloud hanging over them-a potential taint.”
The delay in the McGraw-Hill landmark vote leaves Buck and Nordstrom in limbo over the multimillion dollar venture. “We don’t know how this will affect the project,” Mackie said. “An individual has made an allegation. That happens.”
A vote to make the building a landmark would effectively kill the effort to bring Nordstrom to 520 N. Michigan. The retailer has rejected offers from the city to locate on State Street.
Nordstrom has signed a letter of intent with the Buck Co. that signals its desire to particpate in the 520 N. Michigan project, but has no financial involvement with Buck to date.
Members of the Buck firm expressed confidence Wednesday that they still would win the right to demolish the McGraw-Hill-even if the landmarks commission votes to save the building.
“If this issue comes before the City Council, we feel confident,” said Smith.
At the heart of the controversy is a meeting that occurred last Thursday at the offices of Chicago architect Joseph Antunovich, who has been working with the landmarks group on a plan that would convert the McGraw-Hill, now mainly an office building, to an apartment or condominium structure.
At the meeting were White, LPCI executive director Ronald Emrich, assistant planning commissioner Joseph Zehnder, and representatives of the Buck firm, including Merdinger and Smith.
The group met in a conference room and each side presented its plans for the McGraw-Hill site. Afterward, those present said, Merdinger and White met privately for about 15 minutes, during which the offer was allegedly made.